Logo of Abdullah Al Othaim
Itqan Capital maintained its ‘Neutral’ recommendation for Abdullah Al Othaim Markets Co. and raised the 52-weeks target share price to SAR 130 from SAR 107.
The brokerage firm said in a research note that the company achieved growth in 2020 thanks to the strong performance in H1 2020 due to COVID-related stock-piling.
The company reported improved margins throughout the year due to governmental support, while strong net income in fiscal year (FY) 2020 because of unprecedented profits.
Going forward, Itqan Capital expects that during FY2021 margins will normalize to pre-COVID levels. Real estate activity is expected to continue to regain momentum during the year, especially as the movement restrictions ease.
Expat exodus remains a challenge, especially in light of the anticipated consumer down-trade. However, market consolidation will provide the company with expansion opportunities that could lead to strong revenues in the near future.
The company is projected to record a net profit of SAR 454 million in 2021, compared to a net profit of SAR 451 million in 2020.
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